Employers Have A Duty To Preserve Email Evidence

A salesperson filed a sexual harassment lawsuit against her former employer in violation of Michigan’s Elliott-Larsen Civil Rights Act. She alleged that her supervisor was demanding sexual favors and that he terminated her after she refused. The employer denied the allegations and asserted that she was terminated as a result of her own misconduct.

In discovery, the salesperson requested that the company produce all emails between her and the supervisor. Afraid that the supervisor’s communications with the salesperson could be taken out of context, they deleted all of the requested emails and said they no longer had them. The salesperson filed a motion requesting sanctions for the company’s failure to preserve relevant evidence or spoliation.

In an instant, the employer’s attempt to divert attention away from the supervisor’s emails actually elevated them into the spotlight, making them a central issue in the case. If only they had understood their duty to preserve evidence, the focus could have been on defending the underlying claim instead of using its resources to avoid sanctions related to its failure to preserve evidence.

The Duty

The law does not require employers to preserve every single employment-related document or communication ever created, sent, or received. However, when an employer becomes a party to litigation or should reasonably foresee litigation in the future, the employer has a duty to preserve all evidence in existence at that time that it knows or reasonably should know is relevant to the anticipated action.

The duty to preserve evidence applies to legal disputes under federal and Michigan law. While the Federal Rules of Evidence specifically address this duty and its requirements, the Michigan rules are more general. Further, Michigan courts have not been clear regarding exactly when litigation becomes “reasonably foreseeable.” However, there is no dispute that employers are under a duty to preserve evidence by the time they are served with a complaint initiating a lawsuit, receive correspondence threatening litigation, or get notice of an administrative charge filed by an employee.

In the example above, the employer had a duty to preserve existing evidence as soon as it was served with the lawsuit. In fact, the duty may have applied before then if, for instance, the salesperson, when leaving her termination meeting, said that she was going to sue for harassment.

The Sanctions

Spoliation of evidence refers to the destruction or material alteration of evidence, or the failure to preserve evidence for another’s use in pending or reasonably foreseeable litigation. Spoliation can be intentional or unintentional, ranging from mere negligence in failing to turn off auto-delete to smashing a computer hard-drive with a hammer. When spoliation of relevant evidence occurs, a trial court has the inherent authority to sanction the culpable party to preserve the fairness and integrity of the judicial system.

In Michigan, with respect to spoliation by an employer, sanctions can range from fines to adverse inference or presumptions, dismissal or summary judgment when the spoliation is willful and intentional. The Federal Rules of Evidence expressly limit the court’s ability to impose sanctions only to the extent necessary to correct any prejudice, with more severe sanctions being awarded only upon a finding of the intent to deprive the other party of the evidence.

As the company intentionally deleted the emails to keep them from the salesperson, a court could instruct the jury to presume that the missing emails were adverse to the employer. Even though the emails might be benign, the jury would have to presume that the missing emails established the sexual harassment alleged by the salesperson. Accordingly, the company’s deletion of the emails effectively proved the salesperson’s case and guaranteed its own defeat.

The Preservation

To avoid sanctions, employers should take action to identify the universe of potentially relevant documents that need to be preserved as soon as litigation becomes reasonably foreseeable. First, employers should identify the key individuals or custodians who would have created/have access to relevant hard copy or electronic documents. Next, employers should determine where the documents are located, including whether they are on a server, in a shared network folder or drive, on the custodian’s device, in a mailbox, or elsewhere. Finally, employers should use that information to notify employees of their duty to preserve, institute a litigation hold that would remove relevant information from the automatic overwriting or deletion processes, and collect and preserve relevant data for future use and analysis, if appropriate.

Given the potential impact of spoliation, employers should consult employment counsel regarding the preservation of relevant evidence as soon as litigation becomes reasonably foreseeable. Employers and their counsel can work together to ensure that the process is sufficiently executed and documented on the front end in order to reduce the risk of any subsequent spoliation-related issues. Further, counsel can prepare data retention procedures and work with electronic discovery vendors as needed. Indeed, the company mentioned above surely would have benefited from such counsel and advice.

Lindsay Raymond specializes in employment law, represents employers in all aspects of employment-related matters, and defends employers in employment litigation matters. She can be reached at (231) 714-0161 or lraymond@darlawyers.com.

This article was featured in the December 2017 issue of the Traverse City Business News.

The Use Of False Academic Credentials In Employment

As an employer, have you ever questioned whether an applicant’s educational degrees are authentic? If you discovered that a current employee had used a fake degree to obtain employment or advance his or her career with your company, what actions could you take? How would you know whether a degree was, in fact, fake?

DIPLOMA MILLS

As technology and industry advances, employers are increasingly requiring applicants and employees to possess college degrees in order to obtain employment, promotions, or higher compensation in employment. As a result, more and more individuals are using false academic credentials to get ahead. False academic credentials from fake educational institutions are obtained through diploma (or degree) mills. In exchange for a fee, diploma mills award degrees without requiring their so-called students to meet legitimate educational standards for such degrees. The ruse runs deep. Diploma mills might have websites and materials that appear to be legitimate, including course catalogs, faculty bios, and student testimonials. However, diploma mills do not have real classes, faculty, classrooms, or true academic requirements.

In addition to providing tangible diplomas, diploma mills also provide customers with fake transcripts and other falsified documents, such as a “certification” from the fake educational institution verifying the authenticity of the records.

When ordering a fake degree from a diploma mill, a customer is quoted an initial price for a diploma with his or her desired degree, which is negotiable. Customers may also be offered the opportunity to add a second degree, such as an MBA, for a negotiated two-for-one offer. It is not uncommon for the final agreed-upon price to represent less than 25 percent of the original quoted price. The reason being, the only “products” that diploma mills produce are printed papers containing false academic credentials. If a customer pays $500 for a bachelor’s degree and MBA, the diploma mill’s only costs are the paper and printing. Diplomas ordered from mills also can be made to order. For example, in addition to choosing a desired degree, customers also can pick from a list of (fake) school names and elect their desired GPA and year of graduation.

BILLION-DOLLAR INDUSTRY

Surely, fake degrees obtained from diploma mills are few and far between, right? Not so, according to retired FBI Special Agent Allen Ezell, who co-authored with Dr. John Bear the 2005 book, “Degree Mills – The Billion-Dollar Industry That Has Sold Over a Million Fake Diplomas.” Updated in 2012, “Degree Mills” cites sobering statistics regarding the prevalence of fake degrees:

There are more than 3,300 unrecognized universities worldwide, many of which are outright fakes, selling bachelor’s, master’s, doctorates, law and medical degrees to anyone willing to pay the price.
An international diploma mill run by Americans, with offices in Europe and the Middle East, has sold more than 450,000 degrees to clients worldwide who did nothing more than write a check; its revenues exceeded $450,000,000.
The number of earned PhD degrees in the U.S. is around 40,000 to 45,000 each year, while the number of fake PhD degrees bought each year from diploma mills exceeds 50,000; in other words, more than 50 percent of all people claiming a new PhD have a fake degree.
The Government Accountability Office looked for fake degrees among employees of less than 5 percent of federal agencies and found enough to suggest that more than 100,000 federal employees have at least one fake degree, many paid for by taxpayers.

MICHIGAN’S FALSE ACADEMIC CREDENTIAL ACT

Given the cheap access to fake degrees, how can employers protect themselves from this fraud? In 2005, the Michigan legislature enacted the Authentic Credentials in Education Act (ACEA, MCL 390.601) “to prohibit the issuance or manufacture of false academic credentials; and to provide remedies.”

The ACEA also prohibits the use of a false academic credential to obtain employment, obtain a promotion or higher compensation in employment, obtain admission to a qualified institution, or in connection with any loan, business, trade, profession, or occupation. It further prohibits individuals who do not have a false academic credential from claiming to have an academic credential for the same purposes.

Importantly, the ACEA also provides a significant remedy for employers who fall victim to the use of false academic credentials by applicants and employees. Employers “damaged by a violation of the ACEA may bring a civil action and may recover costs, reasonable attorney fees, and the greater of either the person’s actual damages, or $100,000.” The ACEA is notable in that proof of the violation compels an award of at least $100,000; proof of actual damages is not required.

IDENTIFYING FAKE DEGREES

Employers suspecting use of false academic credentials by an applicant or employee should review the U.S. Department of Education (www.ed.gov/accreditation) and the Council for Higher Education Accreditation (www.chea.org) websites to identify whether the suspect school is recognized as an accredited post-secondary institution. Employers can further protect their companies by performing a mandatory background check, with a detailed educational component, on all candidates receiving offers of employment for positions that require a college degree.

THE COST OF FAKE DEGREES

The cost to employers who unwittingly employ individuals with false academic credentials is high. Positions requiring college degrees typically command higher salaries and benefits such as employer matching contributions to retirement accounts. An employee who uses false academic records to obtain a position that requires a college degree is unqualified and could expose the employer to lawsuits for negligent hiring, or otherwise harm the employer’s reputation in the community.

Janis L. Adams of Danbrook Adams Raymond PLC is an experienced employment law attorney and business owner. You can reach her at jadams@darlawyers.com

This article was featured in the August 2017 issue of the Traverse City Business News.

Category: Employment and Labor Law

‘Delete’ Will Not Save You in Court